SEVA YAGNA TRUST KADOD,BARDOLI vs. CIT (EXEMPTION), AHMEDABAD

PDF · subscribers
ITA 726/SRT/2026Status: DisposedITAT Surat17 July 20268 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(E) did not provide sufficient opportunities to the assessee and that selecting the wrong clause/code was a procedural mistake, not a substantive one. The Tribunal relied on previous ITAT decisions that treated such errors as rectifiable.

What were the facts?

The assessee trust's application for registration under Section 12A/12AB was rejected by the CIT(E) because the assessee failed to provide sufficient details and inadvertently selected the wrong clause/code in the application. The assessee argued that they were given only one opportunity and the mistake was procedural due to recent changes in the law.

What were the issues?

Whether the rejection of registration under Section 12A/12AB solely due to a procedural error in selecting the wrong clause/code and insufficient opportunities granted by the CIT(E) is justified.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

For Appellant: Shri Eress Dadal, A.R
For Respondent: Shri Ashish Pophare, CIT-DR

आदेश / O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by the order bearing DIN: ITBA/EXM/F/EXM45/2025-26/1087071224(1) dated 09.03.2026 passed by learned Commissioner of Income-Tax (Exemption), Ahmedabad [“Ld. CIT(E)”] by which the assessee’s application for registration u/s 12A/12AB of Income-tax Act, 1961 has been rejected and the provisional registration u/s 12A/12AB (if obtained by assessee) has also been cancelled, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36). 2. Ld. AR for assessee carried us to the impugned order passed by Ld. CIT(E) and made two-fold submissions as under:

(i) That, the Ld. CIT(E) has given only one opportunity on 25.02.2026, which the assessee could not avail. Further, the Ld. CIT(A) has passed impugned order without examining assessee’s application on merit. It was also emphasised that the registration u/s 12A/12AB is fundamental and necessary for the existence and functioning of assessee since the assessee is engaged in charitable/religious activities for the benefit of the public.

(ii) Further, there was an inadvertent mistake of selecting wrong clause/ code in filing application. But there are numerous judicial rulings given in recent times by different benches of ITAT that such a mistake i.e. selecting wrong clause/code while filing application is a procedural mistake. Further, occurrence of this mistake is attributable to the reason that there is a substantial change made in recent times in the provisions of section 12A/12AB whereby several clauses/sub-clauses have been introduced for different situations and the professionals/ assessees across India have committed mistakes due to confusion/ lack of understanding of provisions. He submitted that the case of assessee is also same, otherwise there was no reason of selecting wrong section/code. He submitted that by selection of wrong section/code, the assessee does not derive any benefit. He submitted that it was a pure technical mistake on the part of assessee which needs a judicious consideration.

3.

Having made above submissions, Ld. AR requested that the present matter must be restored at the level of Ld. CIT(E) for adjudication afresh after hearing assessee. He submitted that the assessee be permitted to rectify the applicable clause/code, if required by Ld. CIT(E). He submitted that the assessee is ready with the requisite details and documents for making an effective representation before Ld. CIT(E). He assured that assessee shall fully co-operate and make effective representation before Ld. CIT(E).

4.

Per contra, Ld. DR for revenue submitted that there is no infirmity in the orders passed by Ld. CIT(E). He submitted that the assessee voluntarily filed application to Ld. CIT(E) seeking registration u/s 12A/12AB, therefore it was incumbent upon the assessee to stay diligent and make representation before Ld. CIT(E) when called upon. He submitted that the Ld. CIT(E) has given opportunity to assessee but the assessee failed to avail the same. Therefore, the Ld. CIT(E) could not get necessary satisfaction for granting registration due to the failure of assessee. Furthermore, the assessee has filed an application under wrong clause/code. The mistake made by assessee cannot be rectified by Ld. CIT(E). With these submissions, he contended that the rejection of application by Ld. CIT(E) was fully justified and the impugned order be upheld.

5.

We have considered rival contentions of both sides and perused the impugned order as well as the material held on record to which our attention has been drawn.

6.

At first, we find that the rejection of assessee’s application by Ld. CIT(E) is on account of non-compliance by the assessee in furnishing the requisite details and documents. At the same time, on a perusal of Column No. 10 of the impugned order (main body of Form No. 10AD) passed by Ld. CIT(E), we find that the Ld. CIT(E) has granted only one opportunity to assessee, which shows that the Ld. CIT(E) has not afforded sufficient opportunities. The proceeding relating to grant of registration u/s 12A/12AB has significant consequences for the assessee and therefore the Ld. CIT(A) is not justified in passing order by giving only one opportunity to assessee. Therefore, the case requires a fresh adjudication by Ld. CIT(E).

7.

In so far as the mention of wrong clause/code in assessee’s application is concerned, we find that the Legislature has introduced a new regime for granting different types of registrations in section 12A/12AB through TOLA w.e.f. 01.04.2021. The provisions contain multiple clauses and sub-clauses governing different situations of ‘provisional’, ‘final’ and ‘renewal’ of registration. The taxpayers have faced difficulties in understanding and, therefore, inadvertent errors in selecting the correct/applicable clause while filing applications are not uncommon. There are cases all over India being dealt by benches of ITAT concerning the issues of wrong selection of clause/code. We find that in the undermentioned cases, the Benches of ITAT have examined such situations and have provided appropriate relief to the assessees by adopting a pragmatic approach:

(i) ITAT, Pune in Subhadra Foundation Vs. The Commissioner of Income- tax Exemption, Pune, ITA No. 1744 & 1745/PUN/2025, dated 09.09.2025

(ii) ITAT, Mumbai in Rambha Charitable Trust, Mumbai Vs. Commissioner of Income-tax, ITA No. 5111/Mum/2024, order dated 29.11.2024

(iii) ITAT, Kolkata in North Eastern Social Research Centre Vs. CIT(Exemption), Kolkata, ITA No. 741/Kol/2024, order dated 09.07.2024

(iv) ITAT, Indore in Balaji Gau Sarakshan Sansthan Vs. CIT(Exemption), Bhopal, ITA No. 887 & 890/Ind/2025

8.

These decisions consistently hold that an inadvertent selection of an incorrect clause/code, by itself, constitutes a procedural lapse and should not defeat a substantive claim for registration. For an immediate reference, we re-produce below the order of ITAT, Pune in Subhadra Foundation (supra):

“7. The ld. CIT(E) has alleged mis-representation of facts, however, ld. CIT(E) failed to substantiate it. Ld. CIT(E) failed to consider the elaborate submission filed by Assessee to establish genuineness of charitable activities. It is an admitted fact by Assessee that while filing the Form, the incorrect sub-clause was selected. However, this cannot be a grave mistake to make the Assessee ineligible for registration u/s.12A of the Act. ITAT Pune Bench in the case of National Association for the Blind Vs. CIT(Exemption)-Pune in ITA No.2389/PUN/2024 has held as under: “6. We have heard Ld. Counsels from both the sides and perused the material available on record and also copy of case laws relied on by the assessee. We find that admittedly, the assessee trust was required to file application under clause (iii) of section 12A(1)(ac) of the IT Act but due to inadvertent error the application was filed under clause (vi) of section 12A(1)(ac) of the IT Act and for this reason alone Ld. CIT, Exemption, Pune rejected its application for registration. We find that under identical situations, a Co-ordinate Bench of this Tribunal in the case of Raj Krishan Jain Charitable Trust (supra) allowed the appeal of the assessee by observing as under:- “9. As contended the appellant has committed a technical mistake in making the application under Section 12A(1)(ac)(ii) instead of clause (iii) of clause (ac) of sub-section (1) of section 12A of the Act. As pointed out the appellant has filed revised form 10AB for seeking registration under the correct provision i.e. Section 12A(1)(ac)(iii) which can also be considered. 10. In consonance with the decision rendered by the co-ordinate Bench, the typographical error deserves to be corrected. Accordingly, the appeal deserves to be allowed and impugned order dated 15.03.2024 of Ld. CIT(E) is liable to be set aside. Hence, the appeal is allowed and we set aside the order of Ld. CIT(E) dated 15-03-2024 and remand the matter back to the file of the CIT(E) for fresh adjudication by considering amended application of the appellant under Section 12A(1)(ac)(iii) of the Act, or he can call for amended application from the appellant. 11. In the result, the appeal filed by the assessee is allowed for statistical purpose.” 7. Respectfully following the above decision passed by the Coordinate Bench of this Tribunal (supra), & considering the totality of facts of the case & in the interest of justice, we deem it proper to set-aside the order passed by Ld. CIT, Exemption, Pune and remand the matter back to him with a direction to treat the application already filed by the assessee as under clause (iii) of section 12A(1)(ac) of the IT Act instead of under clause (vi) of section 12A(1)(ac) of the IT Act and decide the same as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT, Exemption, Pune in this regard and produce supporting documents/evidences in support of application for registration without taking any adjournment under any pretext, otherwise, Ld. CIT, Exemption, Pune shall be at liberty to pass appropriate order as per law. Thus, the grounds of appeal filed by the assessee are partly allowed.”

8.

The facts of the present case and National Association for the Blind are identical, therefore, respectfully following the Co-ordinate Bench’s Decision(supra), we set-aside the order of ld. CIT(E) for de novo adjudication. Ld. CIT(E) shall provide opportunity of hearing. The Assessee shall file necessary documents before the ld. CIT(E). Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose. 9. In the result, appeal of the assessee ITA No.1745/PUN/2025 is allowed for statistical purpose” 9. Therefore, taking into consideration the facts of present appeal, we are inclined to set aside the impugned order of Ld. CIT(E) for a de novo adjudication in accordance with law after permitting the assessee to rectify the applicable clause/code, if so required, and thereafter examine the application on merits. Needless to mention that the Ld. CIT(E) shall pass a speaking order after giving necessary opportunity of hearing to assessee and the assessee shall also extend full co-operation and furnish necessary documents and explanations as may be required by Ld. CIT(E).

10.

Resultantly, this appeal is allowed for statistical purposes.

Order pronounced in open court on 17/07/2026

Sd/- Sd/- (SUCHITRA KAMBLE) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat दिन ांक /Dated : 17/07/2026 *a.k.

Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPYAssistant Registrar Income Tax Appellate Tribunal Surat Bench, Surat

More judgments on Section 12A

All 6,064 judgments and leading authorities on Section 12A →

Recent GST High Court judgments

Search GST case law →